KSA is threaten from Iran because the extreme Islamic regime of Tehran have dominance aspiration in the Gulf and in the Middle East. This regime constantly tries to destabilise countries in the region like Lebanon, Iraq, Bahrain and Yemen. KSA knows that Iran wants to seize control over all the oil rich countries in the region, and particularly KSA (which also has in its territory the most holly places for Islam), in order the become a power who could challenge the US and the West.
However, if Iran god forbid develop nukes it would not stop there. Besides of KSA, other countries in the ME would want to have nuclear weapons in order to defend themselves against Iran, and particularly Egypt and most probably Turkey. Following to that the NPT would completely collapse and other rogue states would probably develop nuclear capabilities like Venezuela, Myanmar, Sudan.
The Middle East with several nuclear weapons countries will be even more unstable than nowadays. The countries which would have nukes because of Iran's nukes would do it not because they fear from a surprise nuclear attack of Iran, but from Iran using a nuclear umbrella to deter them from suppressing any threat to their regimes from minorities or terror organisation which operate in their territory. However, in light of the nature of the ME and its history of bitter conflicts and lunatic leaderships (Saddam, Gaddafi, the Asad family, Sudan) it would be only a question of time until one of this crack-pots would use its nuclear capabilities and cause a catastrophe.
